Investing giant Fidelity launches new pension freedom service to help advise retirees - and plans list of funds for keeping a pension invested

Investing giant Fidelity has fired the starting gun on pensions freedom by launching a 'full retirement service' for savers and advisers ahead of sweeping reforms next April.

Chancellor George Osborne's announcement that pension savers will be able to use their retirement savings however they wish from next year has sent investment and pension firms scrambling to come up with ways to capture the huge extra demand there will be for investment services and guidance.

The reforms will allow many more retirees to keep their pension savings invested when they stop work and draw an income from them, rather than use the majority of the pot to buy an annuity.

Fidelity, which stands to gain from the changes with its personal pension options, is the first major investing player to make a big move with a newly-designed service. Rivals are likely to follow suit in the months to come.

Choices: Millions of savers will be met with a raft of retirement options once new pension freedom rules are introduced.

Fidelity has launched an online and telephone service that can give guidance or paid-for advice to those unsure of how to proceed.

It will also soon launch a new version of its Select List of investment options that will be tailor-made for people who want to keep their pensions invested throughout their retirement.

Finding the right investments if they wish to keep a pension invested will be one of the biggest challenges savers face under the new rules, as they must carefully balance income with growth and try to ensure they do not run down their pot too fast,.

Fidelity's move comes nine months before the new pension freedom rules kick in, which will see The Pensions Advisory Service and the Money Advice Service charged with providing financial guidance promised by the Government.

Fidelity's website includes guides, checklists and videos explaining the various choices available, and a series of tools designed to estimate how much people will need in retirement and what could be the best products to suit their needs.

Existing pension customers and anyone buying a product through Fidelity will be covered by its 'safety check' service where an expert gives them a phone call if they see them making decisions that could potentially damage them in retirement.

The service has been launched early in response to the estimated 150,000 retirees it says have been 'left in limbo' because of the Budget, as they have put off making any decisions until the new rules come into force.

Richard Parkin, of Fidelity Worldwide Investment, said: 'We want to help people retire with confidence, knowing they are making the right choices for them, that they are not making any critical mistakes and that they have access to the best range of income choices.

'Expert help and guidance has to take centre stage.'

Fidelity argues that because it does not offer its own annuity, it's better placed than insurers to give guidance to customers.

It believes the help it will offer will complement the Government's 'guidance guarantee', which will see TPAS and MAS provide guidance to the hundreds of thousands of people with defined contribution pensions retiring each year.

Going live: Fidelity has launched a retirement service ahead of next year's sweeping Budget changes.

While insurers won't be involved in the guidance guarantee, Fidelity says they will still be the main port of call for anyone who doesn't want to go to TPAS and MAS, and that they should be ready to provide 'holistic' help that doesn't just concern their private pension, but also their state pension, savings, debts and health considerations.

But Fidelity admits that, unlike TPAS and MAS, it cannot be completely impartial when giving guidance, as it does offer a self-invested personal pension product which doesn't charge people for making regular cash withdrawals in retirement, as they will be allowed to do from April.

It has also compiled a series of fund options onto a new Select List designed specifically for people looking to make their pension savings last throughout their later years.

The firm has said the guidance it offers will not just explain pension options, but also clarify issues such as taxation and inflation.

Should a customer want to be told what to do rather than being given guidance, they can opt to speak to a professional adviser, who will charge them up to £2,500 to help them depending on the complexity of their situation.

Fidelity believes that the days of people buying a single product in retirement are disappearing, and instead people will 'blend' their retirement choices to include a mixture of investments and fixed income products like annuities.

Fidelity has also launched a 'retirement hub' to help financial advisers explain the Budget reforms to clients.